Cameron LNG EPC Sets Bonus Deal
McDermott International and Japan’s Chiyoda International have reached an agreement with Sempra Energy’s Cameron LNG related to the continuing construction of the 12mn mt/yr liquefaction terminal in Louisiana, the two sides to the agreement said July 5.
The agreement provides for the McDermott-Chiyoda joint venture, which is the engineering, procurement and construction (EPC) contractor for all three trains of Cameron LNG, to receive incentive bonus payments for achieving construction and commissioning milestones on specified dates for Trains 2 and 3. The first train is commissioning.
It also aligns the start dates for any schedule-related liquidated damages to be consistent with the current schedule and aligns and strengthens the commitment of the joint venture to complete the project in accordance with the current schedule.
“We are extremely pleased with the agreement, which is a testament to the progress and the strong performance of our project team,” McDermott said. “It was crafted with the full support and collaboration of Cameron LNG to optimize the timing and cost-effectiveness of the remaining work – and it does so in a way that we believe will benefit all involved parties.”
The first cargo from the first train was shipped earlier this year. Trains 2 and 3 are expected to begin producing LNG in 1Q 2020 and 2Q 2020, respectively, Sempra Energy said in a statement, noting that the overall economics of Cameron LNG will not change as a result of the incentive agreement with McDermott and Chiyoda.
“Sempra Energy’s projected share of full-year run-rate earnings from the first three trains at Cameron LNG continues to range between US$400mn and US$450mn annually,” the company said.
Cameron LNG is jointly owned by affiliates of Sempra LNG, French Total, Japanese Mitsui & Co and Japan LNG Investment, a company jointly owned by Mitsubishi and Nippon Yusen Kabushiki Kaisha. Sempra Energy indirectly owns 50.2% of the project.